Stocks end flat; oil pulls back
The Dow gains 4, but oil drops nearly to $95 as hurricane damage to Gulf Coast energy facilities appears modest. Trading is light as investors await Fed Chairman Ben Bernanke's Friday speech. Wellpoint jumps after CEO resigns.
U.S. markets finished the day with tiny gains as investors who weren't on vacation continued to wait for Federal Reserve Chairman Ben Bernanke to speak and for Europe to make a decision.
The major averages were little changed at today's close. The Dow Jones industrials ($INDU) closed up 4 points to 13,107. As a further gauge of the quiet trading environment, the difference between the Dow's high and low today was just 63.5 points, the fifth-smallest gap of the year -- and well off the 2012 average of 148 points. And all of those narrow differences have occurred this month.
The lack of action came even as the government reported that the U.S. economy grew at a slightly better clip than thought in the second quarter, and the National Association of Realtors said pending home sales in July rose to their highest levels in two years. The market did pull back after the Federal Reserve's Beige Book report suggested the economy continued to "expand gradually" in July and early August. Several areas of the country were seeing slower growth.
Crude oil (-CL) in New York settled down 84 cents to $95.49 as reports suggested the damage to offshore oil-and-gas platforms and refineries in Louisiana isn't as bad as feared. Energy stocks were lower as well. But the national average price of gasoline was up nearly 5 cents to $3.804 a gallon from Tuesday's $3.756.
The Dow was up as much as 42 points before the Beige Book report came out. In addition to the gain for the blue chips, the Standard & Poor's 500 Index ($INX) was up 1 point to 1,410. The Nasdaq Composite Index ($COMPX) was up 4 points to 3,081. The Nasdaq-100 Index ($NDX), which tracks the biggest Nasdaq stocks, was up 1 point to 2,784. Apple (AAPL), the biggest influence on the Nasdaq-100, was down $1.33 to $673.47, 1.1% below its all-time high of $680.87.
Article continues below. Brent crude, however, settled up 4 cents to $112.54 a barrel in London.
Meanwhile, gold (-GC) settled down $6.70 to $1,663 an ounce in New York. The dollar was higher against major currencies, particularly the euro and the Japanese yen. Interest rates were higher with the 10-year Treasury yield rising to 1.654% from Tuesday's 1.63%.
On Thursday, the government releases its weekly report on jobless claims and reports on personal income and spending. Germany reports on unemployment, and the European Union reports on eurozone business sentiment.
The big earnings reports come from Ciena (CIEN) and Zumiez (ZUMZ) and three of Canada's largest banks: Canadian Imperial Bank of Commerce (CM), National Bank of Canada (CA:NA) and the Toronto Dominion Bank (TD).
Futures trading suggests a slightly lower open on Thursday.
Pandora results cheer
After the close, shares of Pandora Media (P), the Internet-based music service, were up 82 cents, or 8.1%, to $10.90 after the company reported better-than-expected quarterly results and boosted guidance for the fiscal year.
Revenue jumped 51% to $101.3 million. The company lost 3 cents a share using generally accepted accounting, up from a loss of 4 cents a year ago.
On a non-GAAP basis, it broke even, compared with 2 cents a share a year ago. Shares closed down 10 cents to $10.08 a share in regular trading.
|Energy prices -- New York close (updated) |
|Wed.||Tues.||Month chg.||YTD chg.|
|Crude oil (-CL)||$95.49||$96.33||8.44%||-3.38%|
|Heating oil (-HO)||$3.1224||$3.1285||9.63%||7.14%|
|Natural gas (-NG)||$2.6850||$2.6330||-16.33%||-10.17%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.9168||$2.9333||5.14%||9.76%|
|(per gallon; AAA)|
The market's resilience
The good news about the market grinding as it has is that the major averages remain close to the year's highs, reached in the spring. The gains since a sell-off that ended on June 4 are holding, and the market's gains for the year are solid. The Dow is up 7.5%, with the S&P 500 up 12.3% and the Nasdaq up 18.4%.
The bad news is that the highs for the year are now offering serious resistance. Computers are, apparently, set to sell any time an index nears its high.
This makes the market vulnerable to shocks. Europe. An oil price shock if Israel really does attack Iran. A failure of a major financial institution.
Is something bad about to happen? The one question that can't really be answered is what happens between Israel and Iran. That said, the strength of the resistance levels does suggest some pullbacks ahead -- but nothing really horrible.
Here's one more thought. Financial stocks are up nearly 17% this year; they fell 57% in 2008. Moreover, the S&P 500 has had just two bad months this year. In all of 2008, it had gains in just four months.
Waiting for the central bankers to move
Bernanke's speech Friday at the Fed's annual retreat in Jackson Hole, Wyo., is the immediate reason for market inaction. Europe is on hold as well. Investors are hoping the Fed chairman will offer signals on whether the Fed will start another round of so-called quantitative easing. That's the name for bond purchases designed to ensure interest rates stay low. The Fed is on record as saying it expects to keep interest rates low into late 2014.
The Fed's policy-making body, the Federal Open Market Committee, meets Sept. 12-13.
The European Central Bank is supposed to outline plans on buying distressed bonds after its Sept. 6 meeting, but that decision may wait until Sept. 12. That's when Germany's highest court is supposed to rule on whether the new European bailout fund and fiscal pact break German law. If the court says the pact isn't constitutional, financial markets would almost certainly be hit hard.
ECB President Mario Draghi, writing in the German magazine Die Zeit, suggested the ECB will be pushing for stronger coordination of fiscal and monetary policies within the eurozone -- the 17 nations that use the euro as their currency. That would be the price for the bank's buying bonds of countries like Italy, Spain and Greece.
The big worry about the coordinated fiscal requirements is that the austerity that's likely to be imposed will choke off growth for any number of years. Greece's economy has been shrinking for five straight years, and statistics suggest the eurozone now is in a recession.
Joseph A. Bank jumps; Joy Global slides
While the world waits, there is some movement in specific stocks.
Men's clothing retailer Jos. A. Bank Clothiers (JOSB) surged $5.81 to $47.44 after reporting second-quarter profit that topped analysts’ estimates as sales in its direct-marketing business climbed.
Sealed Air (SEE) gained $1.58 to $14.58. The maker of Bubble Wrap hired Dow Chemical (DOW) executive Jerome Peribere to succeed Chief Executive Officer William V. Hickey, who plans to retire next year.
Joy Global (JOY), the maker of P&H and Joy mining equipment, closed up $1.36 to $54.43. The shares had slumped early in the day to as low as $49.65 after cutting forecasts for earnings and revenue. Rival Caterpillar (CAT), the world’s largest maker of construction and mining machines, also recovered from early losses, finishing up 8 cents to $86.09.
WellPoint (WLP) increased $4.41 to $61.80. Angela Braly resigned as CEO of the the second-biggest U.S. health insurer. Braly was ousted after investors, some publicly, expressed discontent with her management. A big issue was the company's spending billions of dollars on stock buybacks that did nothing for the price itself. Over the past two weeks, Jackie Ward, WellPoint’s lead independent director, and a second board member met with shareholders to hear their concerns, Bloomberg News said.
Eighteen of the 30 Dow stocks were higher, led by Verizon Communications (VZ), Walt Disney (DIS) and McDonald's (MCD). Coca-Cola (KO) and Intel (INTC) were the laggards.
Meanwhile, 276 S&P 500 stocks were higher. Sealed Air, Wellpoint and Sears Holdings (SHLD) were the leaders. First Solar (FSLR) and U.S. Steel (X) and for-profit education company Devry (DV) were the laggards.
Fifty-seven Nasdaq-100 stocks were higher, led by Warner-Chilcott (WCRX) and Sears. Chinese Internet company Baidu (BIDU) and Research In Motion (RIMM) were the laggards.
|Short hits from the markets -- New York close (Updated) |
|Wed.||Tues.||Month chg.||YTD chg.|
|13-week Treasury bill||0.1000%||0.100%||0.00%||900.00%|
|5-year Treasury note||0.683%||0.675%||14.02%||-17.71%|
|10-year Treasury note||1.654%||1.630%||10.86%||-11.60%|
|30-year Treasury bond||2.768%||2.743%||7.41%||-4.19%|
|U.S. Dollar Index||81.564||81.381||-1.39%||1.29%|
|(in U.S. $)|
|U.S. $ in pounds||£0.632||£0.632||-0.97%||-1.88%|
|Euro in dollars||$1.25||$1.26||1.91%||-3.26%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.798||€ 0.796||-1.87%||3.37%|
|U.S. $ in yen||78.86||78.54||0.95%||2.29%|
|U.S. $ in Chinese||6.37||6.35||0.24%||0.75%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$95.49||$96.33||8.44%||-3.38%|
This is What
Wow !! Really!! The downward spiral of the freedom of personal choose is not worth talking about.
Yea!! Lets talk about Bush Tax cuts. Really!!
The foundation of our freedoms is the right to make good and bad chooses in your life and reap the results. You believe that no matter what chooses an individual makes you will help them with the bad chooses and punish (TAX) the good chooses.
This is why the prosperity of the US is slowly being erroded.
sx300vne:"I think some people need help when insurmountable problems occur in their lives. The Government should be there to lend a helping hand up and then push them back out in to the world. Making welfare go on forever does the person and our Country a great disservice. Give the person the opportunity they need to stand back up and then move forward with their lives, not being trapped in the system."
I couldn't agree more, however the problem remains that the compensation the private sector is willing to provide to those of low skill sets is incompatible with creating incentive to get off the dole.
We have to either:
1. Reduce the incentive to stay on the dole by limiting the maximum dole they can have and the level of dole provided.
2. Increase the incentive to work by either tax credits, to make the work meaningful enough, or pay them enough so they will be satisfied by the compensation.
Doing both would probably help those who can work but find working for a subsistent wage not compelling enough.
Since Obama is such a great money saver, spending millions on departments that pinch pennies in savings, why don't you write him and Happy Harry asking them why they won't audit the Fed? I did and got zero response!
So you have no defense on the spiral of welfare sucking in more and more of the population.
You change to the cost of welfare compared to the Defese budget??? Really???
This is What
I am talking about healthy individuals.
A large percentage of the black population is on some kind of government welfare program.
Do you not agree that bad personal chooses lead to poverty. Do they have any responsablity to make the correct chooses and work hard to get ahead?
I had great parents, went to public school, studied hard and made good grades. I then worked 60 hour weeks building 3 companies from scratch. Lots of people use to make the hard chooses and work toward real goals in their lives. I see this becoming less and less over the years and groups always pointing out it is not your fault for your station in life. I can no longer find employees that will work 40 hours much less ask them to work over time.
I think some people need help when insurmountable problems occur in their lives. The Government should be there to lend a helping hand up and then push them back out in to the world. Making welfare go on forever does the person and our Country a great disservice. Give the person the opportunity they need to stand back up and then move forward with their lives, not being trapped in the system.
Why is it only the RED states are being hit by Heat Waves, Droughts and Hurricanes
Maybe Mother Earth Hates the Republicans that defile HER. Ya think?
It is very sad about the black population as a whole. They were sold into slavery for thousands of years by their own tribal leaders. First to Egypt and then by the Europeans. It is fact that the leaders of one tribe would raid another tribe and then sell those captured to the slave traders at markets along the coast.
Today they are sold generation after generation into the State and Federal welfare system. They will never get ahead with out self worth. You live in the land of personal freedom. Make the right chooses and pull yourself up. The government will never make you truly free. They do not care if you get an education or a job. They just want your vote to sustain the system.
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